The US Congress is snoozing as the fiscal cliff approaches

President Barack Obama with the House of Representatives speaker John Boehner. Photograph: Carolyn Kaster/AP

This week, if all goes well, Barack Obama will leave Washington to start on his customary vacation – 20 days in Hawaii, returning on 6 January. If he manages to keep all 20 days it will be both a miracle for him and a disaster for the American economy. President Obama is currently trying, unsuccessfully, to negotiate with his political nemesis John Boehner, a leading Republican lawmaker, to resolve the infamous "fiscal cliff" deadline due on 2 January.

America's fiscal cliff, to borrow a metaphor appropriate to the season, is something like the Ghost of Christmas Future. It is the spectre of an ill-conceived piece of 2011 legislation in which Congress, unable to create a budget last year, promised to create a new austerity budget by 2 January 2013.

If it doesn't – and indeed, Congress has been remarkably serene about the prospect of pitching off the cliff – the United States will be hit with a combination of $110bn of fiscal blows. The first is automatic hikes in levels of personal taxation for most of the population, and the second will be deep spending cuts to programmes such as national defence. Approximately 2 million unemployed Americans will lose their unemployment insurance as the clock strikes midnight.

And now, in just a few weeks, the US will hit its borrowing limit again, and be unable to pay its bills unless extraordinary measures are taken by the treasury. The treasury can buy about two or three months' more time, but after that, the country will default on its debts.

Under such pressure, you would expect Congress to be rushing to come up with a solution. But in fact it's quite the opposite: there has not been one bit of progress. The scrooges of Congress hear the rattling chains of economic disaster and turn over in a fitful sleep, repeatedly slapping the "snooze" button to keep dreaming of a world in which they never have to compromise. No alarm is loud enough, it seems, to wake this Congress from its dogmatic slumber. It increasingly looks like none ever will be. Both sides agree that the government must cut the budget and raise taxes; yet they have made only the most feeble attempts to actually get there.

The negotiating positions are clear. President Obama wants to avoid the fiscal cliff's automatic tax hikes on middle-class Americans. He wants tax increases on citizens who earn more than $250,000 a year, reasoning that they can afford it. Republicans, however, find this definition of "wealth" unpalatable. They are only willing to raise taxes on those making more than $1m a year, and they want to slash government spending on social safety-net programmes like social security and Medicare. The result? Snooze, snooze, and snooze again.

In Obama's first term, it was attributed to an unco-operative relationship between the president and the leaders of the Republican party. Republicans such as Senator Lindsey Graham criticised the president for not being "bipartisan". That led to the creation of sloppy economic and financial policy. In 2009, after the American financial crisis, a call for financial reform devolved into thuddingly dense piece of legislation – the Dodd-Frank financial reform bill – that was notable in its failure to create a single real change on the spot. It was, instead, a 900-page to-do list that required every major decision to be made later – and usually, of course, by a committee.

In 2011, Congress dragged its feet on budget negotiations for so long that the country was within hours of being unable to pay its bills. The United States lost its vaunted "AAA" credit rating. And it solved that crisis by creating another – the fiscal cliff.

Now, armed with his re-election and perhaps the desire to avoid repeating past legislative debacles, the president has notably changed his negotiating style to a more co-operative one. In recent weeks, he has invited chief executives and Wall Street leaders into the White House to share their views on taxes and austerity.

Strangely, the same Republicans who complained that the president was too rigid before are no more pleased by his co-operative tone this time round. In fact they're more combative. Speaker of the House John Boehner, who has been leading the Republican side of the negotiations, headed to Ohio last weekend with a saucy challenge to the president: "Ohio has both cellphone service and airports – so if the president wants to talk or meet, it won't be a problem at all." Even this tone is progress: last year, in a fight over the budget, Boehner once astonishingly refused to return the president's call.

Graham recently berated the president about the budget. "How about manning up here, Mr President, and use your mandate to bring this country together to stop us from becoming Greece," he said.

What Graham doesn't realise is that the United States is already Greece: we are in a vicious cycle in which kicking the can down the road seems like perfectly plausible politics. Boehner signalled on Friday that it's not a bad idea, in his eyes, to threaten not to raise the debt ceiling again. That indicates the queasy possibility that this political nonsense will extend for at least three more months. However, the real risk is that, no matter what the president does, it will extend for four more years. The rattling of the chains is only getting louder.

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